Which statement about risk mitigation and contingency planning is correct?

Which statement about risk mitigation and contingency planning is correct?

• A. Risk mitigation is the development and deployment of a plan to avoid, transfer, share, and reduce project risk.
• B. Contingency planning aims to avoid risk entirely.
• C. Risk mitigation involves only transferring risk.
• D. Contingency planning has no relation to risk events.

Answer: (A)

Risk mitigation is about taking proactive steps to lower either the likelihood of a risk occurring or its impact. The statement that it involves developing and deploying a plan to avoid, transfer, share, and reduce project risk captures the full range of typical responses: avoidance (changing the plan to eliminate the risk), transfer (shifting the risk to another party), sharing (risk-sharing arrangements), and reduction (implementing controls to lessen the chance or effect). Contingency planning, by contrast, is about having predefined actions to take if a risk event occurs, not about avoiding the risk in advance. It prepares for risk events and their triggers rather than preventing the risk from happening. The other options misstate these ideas: contingency planning is related to risk events, risk mitigation is not limited to transferring risk, and avoidance of risk entirely isn’t the aim of contingency planning.

Risk mitigation is about taking proactive steps to lower either the likelihood of a risk occurring or its impact. The statement that it involves developing and deploying a plan to avoid, transfer, share, and reduce project risk captures the full range of typical responses: avoidance (changing the plan to eliminate the risk), transfer (shifting the risk to another party), sharing (risk-sharing arrangements), and reduction (implementing controls to lessen the chance or effect). Contingency planning, by contrast, is about having predefined actions to take if a risk event occurs, not about avoiding the risk in advance. It prepares for risk events and their triggers rather than preventing the risk from happening. The other options misstate these ideas: contingency planning is related to risk events, risk mitigation is not limited to transferring risk, and avoidance of risk entirely isn’t the aim of contingency planning.